FAMILY MATTERS IN THE GREAT WEALTH TRANSFER
Discussing plans for an inheritance before the inevitable happens makes for a less stressful outcome.
4 min
At kitchen tables and in boardrooms across the country, Australian families are starting to solve a multi-trillion-dollar puzzle: how to pass on wealth to the next generation.
As the country’s Baby Boomers begin to enjoy retirement and many step out of the day-to-day operations of their businesses, they have time to consider the legacies they want to leave and how to help their children and grandchildren thrive after they have passed.
Australian women look set to inherit a significant chunk of the nation’s wealth and will shoulder a big responsibility in managing it for future generations. A March 2024 report by JBWere projected that women will become managers of 65 percent of the $5 trillion that is set to change hands in coming years.
This trend is one part of the phenomenon known as the “oldest daughter effect,” or the tendency for daughters to take a leadership and decision-making role within families.
Former JBWere Australia chief executive Maria Lykouras says oldest daughters often take on caring responsibilities as parents age, and parents in turn rely on them to help preserve and manage their wealth.
“They want that legacy to be managed in a way similar to how they thought about it and for the purposes that were important to them,” she says.
“They see the eldest daughter as the trusted person in the family that will continue that legacy and will take care of the broader family finances for everyone else.”
No matter who wealth is being passed onto, it’s important for all families to prepare for this moment. If you’ve ever read an Agatha Christie murder mystery or watched the siblings of fictional media mogul Logan Roy battle over his legacy in Succession, you know the level of drama that can emerge through the inheritance process.
It can crystallise family values, but if done carelessly can cause undue confusion, anger and hurt for loved ones.
Here are three essential rules experts say will help smooth the transition of wealth while making sure the next generation is properly prepared for the responsibilities and opportunities that lie ahead.
Get in early
Wealth managers agree that the single biggest mistake they see families make is leaving it too late to have detailed conversations about how the wealth transition will work for them.
“The last thing that you want is for you to pass away and then the money gets into the hands of the children, but the children either don’t know what the money was, they don’t know where it is, or there are multiple children and they are all vying for it,” Lykouras says.
KPMG’s global leader of family business, Robyn Langsford, said she has seen families where adult children are in their 40s and 50s yet their parents have still not communicated with them about how wealth will be distributed when they pass.
“If you are part of a pool of siblings in that age group and you don’t have transparency about where the ultimate ownership is going to end up, that can lead to a lot of anxiety and tension in the sibling group,” she says.
Managing partner at Integro Private Wealth, Justin Gilmour, spends significant time speaking to both the parents and children well ahead of a transition of assets to clarify the priorities of both groups.
“What I think happens a lot of the time is that there are assumptions made, and those assumptions are incorrect,” he says.
“There are not open and frank discussions early enough… That breeds resentment.”
Explain your reasoning
In many family groups, not everyone will be receiving an equal slice of the family wealth.
Advisors see families factoring in a range of issues when dividing assets, including the independent wealth of adult children and their involvement in family businesses.
The key, however, is explaining the reasoning behind the division ahead of time.
“Where it is going to be unequal, that person needs to be proactive in communicating that fact and also the reasons they have come to that decision,” Langsford says.
“The worst thing you can have is some family member feeling like their father or mother loved them less … but actually [the decision] could be due to something completely different.”
“One child might have sacrificed a lot more to further the family’s wealth, for example.”
Now is also the time to discuss family values and how the next generation will manage the assets in line with these.
“Most importantly, have conversations around: What is the purpose of the family’s wealth? Do they want to give money to charity? What do they want to do with the business?” Lykouras says.
Formalise it
It’s also important to think about the formal structures around your plan.
Grant Thornton’s national head of family business consulting, Kirsten Taylor-Martin, says too often families develop a blueprint for how the younger generation will take control of assets, but the wills and estate plans of older parents do not allow for this in practice.
“What you find is that so many families don’t actually make sure all their legal documentation makes that happen,” Taylor-Martin says.
“The estate plan has to be a crucial step in your succession planning process to make sure your vision comes to life.”
It’s also possible to link a formal document like a family constitution, which is not legally binding but sets out a plan for how decisions will be made and what will happen to the family business if there is one.
In some families, writing constitution documents has helped clarify the path forward.
“What it has done is ended all of those assumptions. It basically preserves family relationships.”
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Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
4 minA sharp technology sell-off has exposed a new anxiety on global markets: whether the enormous borrowing behind the artificial-intelligence infrastructure boom can generate sufficient returns as interest rates rise and Chinese competition intensifies.
The artificial-intelligence investment boom has powered technology shares, semiconductor manufacturers and data-centre operators to extraordinary heights. Last week, investors were given a reminder that much of this expansion is being built with borrowed money.
The technology-heavy Nasdaq Composite fell 4.5 per cent over the week ended October 16, its weakest performance since late June. Semiconductor shares suffered an even deeper correction, with the Philadelphia Semiconductor Index losing about 11.4 per cent.
The selling spread quickly through global markets. Micron Technology fell 14.6 per cent over the week, while South Korea’s Samsung Electronics and SK Hynix dropped approximately 18 per cent and 24 per cent respectively.
This was more than a routine bout of profit-taking. Investors were reassessing three interconnected risks: higher interest rates, the rapidly expanding debt burden attached to AI infrastructure and the prospect of stronger competition from Chinese memory-chip manufacturers.
The debt behind the AI build-out
Artificial intelligence requires a physical infrastructure network of enormous scale. Data centres must be built, advanced processors purchased, power supplies secured and cooling systems installed before customers begin generating meaningful revenue from them.
Technology companies are increasingly supplementing their own cash with corporate bonds, syndicated loans, equipment leases, private credit and project-level financing.
JPMorgan describes the emerging funding model as a combination of conventional corporate borrowing and project finance tied to individual data-centre assets. In Australia, the Reserve Bank estimates that syndicated loans accounted for approximately three-quarters of data-centre financing during 2025 and 2026 to date.
The numbers are becoming large enough to affect broader credit markets. The Federal Reserve Bank of Dallas has cited Wall Street estimates suggesting AI-related investment-grade bond issuance could approach US$300 billion in 2026 alone.
That borrowing is not automatically problematic. Debt can be an efficient way to finance long-lived infrastructure when future revenue is sufficiently predictable. The concern is that AI technology, customer demand and computing economics are changing much faster than the repayment schedules attached to the assets.
A data centre financed today may carry debt for years. Investors must therefore make assumptions about future utilisation rates, electricity prices, chip performance, customer concentration and the amount businesses will ultimately pay for AI computing.
When interest rates rise, those assumptions become less forgiving.
Inflation changes the calculation
September’s US inflation data intensified the pressure. Consumer prices increased 3.7 per cent over the year, ahead of market expectations and up from 3.4 per cent in August.
The hotter reading reduced confidence that interest rates would fall quickly and pushed bond yields higher. That matters particularly for companies whose valuations depend on profits expected well into the future, as well as highly leveraged infrastructure operators that may need to refinance.
CoreWeave has emerged as a closely watched test case. The specialist cloud-computing company has accumulated substantial debt and lease obligations to build AI capacity, while relying on a concentrated group of large technology customers.
Its shares fell sharply during the sell-off, while the cost of insuring its debt against default climbed. CoreWeave has argued that its contracted backlog more than covers its obligations and that financial markets do not always understand its business model. Nevertheless, its securities have become a proxy for investor confidence in debt-funded AI infrastructure.
Oracle, another major investor in AI computing capacity, fell 8.8 per cent in Friday trading, while CoreWeave dropped 15.5 per cent.
The question is shifting from how much AI infrastructure can be built to how profitably it can be operated.
China adds another source of pressure
Interest rates were not the only catalyst. Reports of advances by Chinese memory-chip producer ChangXin Memory Technologies raised concerns that lower-cost Chinese products could increase competition across the global semiconductor industry.
Memory chips are essential to AI systems, but the industry is historically cyclical. Periods of tight supply and high pricing can encourage rapid investment, eventually producing oversupply and falling margins.
The prospect of a well-funded Chinese competitor expanding its technological capabilities unsettled investors in Samsung, SK Hynix and Micron. It also demonstrated that AI-related demand does not insulate chipmakers from conventional competitive pressures.
That combination—slower rate cuts, more expensive financing and potentially cheaper supply—challenged the assumption that every company exposed to AI would enjoy continually expanding margins.
A reset rather than the end of the boom
The sell-off does not establish that the AI boom is ending. Demand for computing power remains strong, the largest technology companies continue to generate formidable cash flows and many infrastructure projects are backed by long-term customer contracts.
What has changed is the market’s willingness to overlook the price and financing structure of that growth.
The most resilient companies are likely to be those able to fund investment from operating cash flow, secure long-duration customers and demonstrate that new capacity will earn returns comfortably above its financing costs.
More speculative operators may face greater scrutiny, particularly where debt is expensive, customers are concentrated or expected revenue depends on demand that has not yet materialised.
For Australian investors, the lesson extends beyond US technology shares. Local data-centre operators, infrastructure funds, electricity suppliers and property groups are increasingly exposed to the same investment cycle.
Artificial intelligence may remain one of the defining growth themes of the decade. But last week’s correction showed that enthusiasm for the technology does not eliminate financial discipline.
The next stage of the AI boom will be judged not only by computing power, model performance or demand for chips, but by something more traditional: whether the assets being financed can generate enough cash to repay the money borrowed to build them.
Fact box
Nasdaq Composite: Down 4.5 per cent for the week ended October 16, 2026
Philadelphia Semiconductor Index: Down approximately 11.4 per cent
Micron Technology: Down approximately 14.6 per cent
Samsung Electronics: Down approximately 18 per cent
SK Hynix: Down approximately 24 per cent
US September inflation: 3.7 per cent annually
Estimated 2026 AI-related investment-grade issuance: Approximately US$300 billion
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